Standing committee chair Tim Wilson says that 2020 has shaken faith in ASIC and that sweeping reforms could be on the cards for 2021.
Handing down the standing committee on economics’ report on ASIC, Mr Wilson roundly criticised ASIC for the slew of failures that hounded it through the latter half of 2020, saying the corporate regulator “must be beyond reproach in its governance and accountability”.
“ASIC has a lot of work to do to rebuild its credibility and confidence with the committee, and likely the wider business and Australian community. Declining confidence did not originate with the investigations into the Chair and Deputy Chair, though it has substantially compounded it,” Mr Wilson said.
“While it remains a matter for the Treasurer, these issues justify consideration for reform of ASIC to help rebuild confidence in its capacity, so it fulfils the important statutory functions the Parliament entrusts it with.”
Mr Wilson also said that the committee remained concerned about the “spectacular and unsupportable claims” contained within ASIC’s self-managed super fund (SMSF) fact sheet – that appeared to exaggerate the costs of running an SMSF – saying that while the matter “may appear trivial” it was indication that the regulator was holding itself to a different standard than those businesses it regulated.
“To date there has been no acknowledgement of this error, and apology for it. Instead ASIC has stood by it and claimed that new data has simply superseded it. This attitude undermines ASIC’s credibility. Had a regulated business made similarly misleading statements about a competitor product they would face sanction,” he said.
Mr Wilson warned that ASIC would have to lift its game in 2021 and prove to the standing committee that it had accepted responsibility for its failings and was focused on its “core duties of enforcement”.
“It is difficult to say that there is as much confidence in ASIC today as there was at the same time last year and ASIC should seek to address these issues as a matter of urgency because they go to the heart of their capacity and internal processes,” Mr Wilson said.